What are consumers seeking when they head back to movie theaters after a year’s absence? “The whole enchilada,” Adam Aron, the CEO of AMC Entertainment, said on the theater company’s earnings call yesterday.
Theater attendance worldwide is still not close to what it was before the Covid-19 pandemic. But the consumers who are already back at the movies are eating a lot more popcorn and drinking more soda than they used to. Food and beverage revenue per patron at AMC’s theaters jumped from $4.76 in the first quarter of 2020 to a record-high $7.37 over the same period in 2021.
“Clearly, guests returning to our theaters are eager to participate in the full theatrical experience.” Aron said. “More people are going to the concession stand and they’re buying more things when they get there. These people have been deprived of their AMC popcorn accompanied by a nice 54-ounce cup of Coca-Cola.”
Aron attributed the food boom to increased usage of the company’s mobile app, which recently began offering patrons the option to place concessions orders in advance. He also said AMC’s popular private theater rental program boosted the per-patron food and beverage revenue figure.
Popcorn and soda fatten AMC’s bottom line
Concessions are a high-margin segment of the theater business. They typically account for about a third of AMC’s annual revenue: In 2019, the company’s last normal year, food and beverage generated $1.7 billion of AMC’s $5.4 billion in revenue. (The rest came from ticket sales.)
AMC is generating fewer total sales of food and drink than it did then because of the drop in attendance. Though almost all of AMC’s 600 US locations, and a third of its 350 locations outside the US, are now open (between 15% and 60% capacity), the chain hasn’t had many new movies to show. As a result, food and beverage revenue for the quarter was only $50 million, down from $288 million in the same period last year.
But Aron expects the per-person popcorn craze to continue once more consumers head back to theaters later this year. If that happens, AMC would sell more popcorn, candy, and soda than it ever has before.
“I think there will be a lot of this splurging going on,” Aron said. “And so, I would expect that we would see elevated food and beverage spending levels for quite some time.”